Relationship between absentee landownership and quality of life in Alabama

Abstract

This study examines the relationship between absentee land ownership of farm and forestland and quality of life in Alabama. Quality of life is measured with a set of variables including per capita income, educational attainment, percentage of students in public schools eligible for free or reduced priced food, total amount of local funds spent per student in school, and percentage of female headed households. The extent of absentee land ownership is documented by detailed examination of county tax records. I distinguish between absentee owners who live in a different Alabama county from the land they own and the owners who live in a different state. Owners of agricultural and forestland in Alabama benefit from a current-use tax system which results in a lowest property tax rates in Alabama. These low tax rates in turn limit the ability of local governments to meet citizen needs in some of the poorest counties of the nation. Correlation was found between the percentage of absentee owned land and quality of life in Alabama. Findings from ordinary least square regression supported the correlation results. The result of this study indicates that the benefit of forest and farmland tax policy is mostly enjoyed by absentee owners in Alabama, including the owners from outside of the state. Therefore, this study suggests reconsideration of the tax policy of Alabama to foster the socio-economic development in many of the poorest counties in this state.